• Joe Breitfeller

Japan Airlines Reports First Quarter FY20 Loss of 93.7 Billion Yen on 78.1 Percent Revenue Decline

Japan Airlines reported on Monday a first quarter EBIT loss of 131 billion yen and a net loss of 93.7 billion yen on a 78.1 percent year-over-year quarterly revenue decline to 76.3 billion yen. During the quarter, international passenger traffic declined 98.6 percent.

Japan Airlines Boeing 787-8 Dreamliner - Courtesy Boeing

On Monday (August 3, 2020) Japan Airlines reported a Fiscal Year 2020 First quarter (April-June) EBIT loss of 131 billion yen and a net loss of 93.7 billion yen (US $883.9 million). The carrier’s revenue fell by 78.1 percent versus the same period last year to 76.3 billion yen (US $719.5 million). International passenger revenue declined 97.9 percent to 2.7 billion yen on a 98.6 percent year-over-year decrease in demand, while domestic revenue decreased 85.1 percent to 18.9 billion yen on an 86.7 percent decline in demand. During the fiscal first quarter, JAL operated 3,754 cargo-only flights with passenger aircraft to deliver essential goods and medical supplies across their international network. This resulted in a 16.9 percent increase in cargo revenue to 26.5 billion yen compared to the same period last year.

Japan Airlines Reports FY20 First Quarter Financial Results - Courtesy Japan Airlines

Due to ongoing international travel restrictions, JAL expects a long-term delay in market recovery. While domestic demand increased after travel restrictions were lifted in May, with a recent uptick in COVID-19 cases in Japan, the outlook remains uncertain. The carrier will continue operating cargo-only flights for the transport of essential supplies. During the fiscal first quarter, Japan Airlines reduced their year-over-year operating expenses by 125 billion yen, largely attributable to a reduction in capacity-linked expenses.

Since February, JAL has raised approximately 300 billion yen and the company has an untapped credit line of 200 billion yen. As of June 30, 2020, the carrier had 394.3 billion yen in cash on hand and a debt-to-equity ratio of 0.5x. Interest bearing debts due in the next 12 months are limited to a total of 50.7 billion yen. Based on current forecasts, Japan Airlines expects a full fiscal year revenue recovery of around 30-45 percent versus FY 2019. In order to further protect the company’s liquidity position, JAL has suspended their interim shareholder dividend payment.

Source: Japan Airlines